Tag Archives: promotions

Which is Better Tangerine or PC Financial: When Will I Get My Bonus Interest from PC Financial?

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Both Tangerine and PC Financial had a special interest promotion where they offered higher interest for new deposits made in September 2014. It’s now October and the first bonus interest payment is in for Tangerine. But I don’t see anything extra in our PC Financial account: when do they pay the bonus interest?

PC Financial Begrudges Paying Bonus Interest

Unlike Tangerine which pays bonus interest at the end of each month of a promotion, PC Financial only pays it once at the end of the promotional period.

Their terms and conditions state that interest will be calculated daily but only paid after the entire promotional time period is over. So the bonus interest payment will be deposited sometime between December 15, 2014 and December 31, 2014. (Don’t be surprised if it doesn’t appear till January 2015 but is back dated to December.)

The interest will be deposited in your savings account if you have one in good standing, or, if not, into your chequing account.

So be patient. It’s coming but not for a long-ish while.

Tangerine Pays Bonus Interest Monthly

As mentioned above, for the past few promotions anyway, Tangerine has paid any promotional bonus interest each month. It shows up as a separate line item for the account. First, they report the regular interest. Then they report any bonus interest.

UPDATE: In 2017, at Tangerine the regular interest for, say, January, would be posted on January 31 and the bonus interest would be posted on February 1. I’m not quite sure why there is a one day delay!

Is Tangerine Paying Compound Interest and PC Financial Paying Simple Interest?

No.

From what I can determine from the original offers’ terms and conditions, neither bank is paying compound interest. So even though you can get and spend your bonus interest more quickly using Tangerine, it does not appear that you will earn more interest than at PC Financial. (In fact, you will earn slightly less as the promotional interest rate at Tangerine was quoted as 3% and at PCF was quoted as 3.1%.)

Well, there’s one possible quirk.

Say you deposited $1000 extra new dollars in Tangerine on September 30. Assuming you don’t touch your account from then until November 1, on November 1, you will receive a bonus interest payment. Because I don’t want to do the math carefully, let’s just estimate it is $1.44.

Now, I suppose, you could take $1.44 out of your $1000 in savings on November 2 and you would still continue to receive the same bonus interest because your total amount in your savings account would still be the $1000 required.

In the PCF account, if you took out the $1.44, you would only be earning promotional interest on $ 1000-$ 1.44 = $ 998.56 for the rest of the year because it won’t pay you the $1.44 until the end of the promotion.

Still, this is just a small quirk. It’s not really got anything to do with compounding interest.

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Testing the Rules of the Tangerine Interest Rate Promotion by Moving Money Between Spouses

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As I mentioned in a previous post about the short-term higher-interest-rate offers from Tangerine and PC Financial, we don’t have a huge stash of cash waiting to transfer into Tangerine to take advantage of their current 3% for 3 months offer. Or do we? I wondered if there is some way to bend the rules for the promotion by moving some money between my husband and I.

The Tangerine Interest Rate Promotion Won’t Apply If You Just Transfer Money Between Joint Accounts

Each time Tangerine offers one of these short-term rate promotions, it seems like the list of exemptions grows longer. That’s because of people like me who resent not getting the higher interest even though we are loyal long-term customers. We are on the lookout for loopholes.

If you and your partner have joint accounts at Tangerine, you can’t get the special interest rate just by transferring money between some accounts. The higher interest only applies on balances higher than the total closing balance on August 31, 2014 (for the promotion I’m discussing here) across all your various accounts.

But my husband and I don’t have joint accounts at Tangerine. Well, we do have a joint US dollar account but US dollars aren’t eligible for this special rate anyway.

What, I thought, if I moved a few thousand of my husband’s emergency fund money into my savings account? Would that work? Could it really be that easy??

What Do the Tangerine Rules Say About Spouses?

I read through the rules again fairly carefully.

I can’t find any fine print that precludes this manoeuvre!

Testing the Crooks Contrivance

OK, if “Smith” can have a manoeuvre and “Norbert” can have a gambit, can’t I have a contrivance? That’s “a thing created skillfully and inventively to serve a particular purpose.” Ok so maybe it’s not as a good as the CO2 scrubber that brought the crew of Apollo 13 home safely, but still….

So today I took out the money from my husband’s Tangerine account via his “Big Canadian bank.” As soon as it’s in and the hold is off, I’ll transfer it into my Tangerine savings account. Then I’ll have to wait for the first interest payment at the end of September to see if it works.

Please: Stay tuned! Where else can you follow (non-)nefarious money-making schemes like this in slow motion?

REMEMBER The Person Who Owns/Made the Money MUST Claim the Interest on Their Tax Return!

While it’s fine to play games with Tangerine (in fact it’s fun!) it’s important not to try to game the CRA. They not only own the ball, they own the teams, the refs, the stadiums and the leagues!

Since this was my husband’s money, if it earns any interest, HE will have to claim it on his income tax. That may be a bit confusing to the CRA as the interest will be reported on MY T5. However, they should realize that by following their own attribution rules, we will end up paying MORE taxes, so I think they’ll be good with that.

Never cheat on your taxes! A few bucks in savings could result in a lifetime of misery.

And the Results are In for the Crooks Contrivance!

It’s now October and Tangerine has paid its interest for the September portion of its high interest on new balances promotion.

Did the money I moved from my husband’s savings account to my own earn the bonus?

Yes!

Once more proving no matter how idiot-proof you make an offer, there’s always some idiot just a bit more idiotic than you’d anticipated.

Still, it’s an interesting option for anyone else who doesn’t hold all their assets jointly at Tangerine with their spouse.

Can I Still Get the High Interest If I Try This Tangerine Trick Today?

Just a word of warning: the Tangerine promotion only applied to new deposits made up till September 30, 2014. So for now, this strategy is not going to work. If the pattern continues, however, there will be another bonus interest promotion sometime in the New Year. I’ll write about it here, and try to remind readers of this option at that time.

What Tangerine is offering right now, is bonus interest on money put into a designated TFSA Kick Start account. So if you have cash waiting to go into your TFSA on January 1 (or if you will be stockpiling that cash quickly over the next month or so) you may want to check into it.

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